US EPA seeks comments on SRE portion of proposed REGS rule

The U.S. EPA announced April 12 that it will reopen the comment period on one aspect of proposed rule issued in 2016 in an effort to “expand transparency surrounding the small refinery exemption program and provide further opportunity for input.”

The agency’s announcement relates to its proposed renewables enhancement and growth support (REGS) rule, which was first released in October 2016. The proposal was originally subject to a 60-day comment period, which was scheduled to close on Jan. 17, 2017. The comment period was later extended through Feb. 16, 2017. The proposed rule has now been pending for more than two years.

The proposed rule contains a wide range of provisions related to the Renewable Fuel Standard. Some major changes proposed by the rulemaking include an updated RFS regulatory structure that would allow biofuel producers to partially process renewable feedstocks at one facility process them into renewable fuels at another facility using existing pathways. The proposal also aims to revise gasoline regulations to make it clear E16-E83 fuel blend are not gasoline and are not fully subject to gasoline quality standards, a change the agency said would allow for expanded availability of high ethanol fuel blends for use in flex fuel vehicles (FFVs). In addition, the rule also includes new feedstock approvals for cellulosic biofuels produced from short-rotation poplar and willow trees, cellulosic diesel produced from coprocessing cellulosic feedstocks with petroleum, and renewable diesel and biodiesel produced from noncellulosic portions of separated food waste.

The proposed rule also contains numerous small changes and updates to RFS regulations, including provisions related to small refinery exemptions (SREs). The SRE portion of the REGS rule is the subject of the agency’s new comment period.

In the April 12 notice posted to its website, the EPA said language in the REGS rule proposed to codify a determination that basic information related to EPA actions on petitions for SREs may not be claimed as confidential business information (CBI). “Specifically, the proposed regulations would specify that with respect to each decision on a small refinery/refiner exemption request, we would release to the pubic the petitioner’s name, the name and location of the facility for which relief was requested, the general nature of the relief requested, the time period for which relief was requested, and the extent to which the EPA granted or denied the requested relief,” said the EPA in the notice.

The EPA is opening a new comment period to provide members of the public to provide additional input on that proposed determination. The agency said it is not seeking comments on any other aspects of the proposed REGS rule at this time, and any comments received on topics other than the proposed CBI determination will be deemed beyond-the-scope. The 15-day comment period will open following publication of the notice in the Federal Register. Comments can be filed on www.Regulations.gov under Docket ID No. EPA-HQ-OAR-2016-0041. A prepublication version of the notice can be downloaded from the EPA website.

“The National Biodiesel Board has advocated vigorously for additional transparency regarding EPA’s small refinery exemptions,” said Kurt Kovarik, NBB’s vice president of federal affairs. “The agency’s action to accept additional comment on a two-year-old proposal to reveal additional details about the companies requesting hardship relief, their reasons that relief is needed, and the timeframe that the relief is needed is a step in the right direction. The agency should make this information public when the petition is submitted, not just when it is granted.”

Kovarik said NBB will continue to aggressively advocate for a solution to the demand destruction resulting from retroactive small refinery exemptions. “By granting retroactive exemptions for 2015, 2016 and 2017, EPA has destroyed demand for more than 360 million gallons of biomass-based diesel over the past year,” he said. “We look forward to working with EPA to ensure that the annual volumes set by the agency are fully met.”

Growth Energy called the EPA’s effort to increase transparency on SREs helpful progress, but said the agency should go even further. “Any move by EPA to increase transparency is long overdue but always welcome by this industry,” said Emily Skor, CEO of Growth Energy. “For years, we’ve been trying to navigate these exemptions in the dark, all while over 2.6 billion gallons of ethanol demand has been lost. It is imperative that EPA and the Department of Energy reveal the methodology behind granting these exemptions, and for EPA to fully recognize that every time they grant an exemption, they are taking away critical demand from our already struggling rural economy. We look forward to participating in EPA’s comment period on this proposal and continuing to impress upon them the dire importance of more transparency for our industry and for rural America.”